Trader keeps bidding on Sotheby's
David Russell | email@example.com
optionMONSTER's Heat Seeker monitoring system detected the purchase of 2,500 August 45 calls for $1.78 and the sale of an equal number of August 43 calls for $2.98. Volume was close to open interest in the 45s, which suggests that an existing long position was probably closed and rolled to the higher strike.
Long calls fix the price where shares can be bought, letting the investor position cheaply for upside in the auction-house stock. Today's transaction let the trader collect a credit of $1.20 and stay exposed to further gains. (See our Education section for more on how options can be used to manage risk.)
BID is up 1.18 percent to $45.53 in morning trading. It's up 35 percent in the last three months amid a recovery in consumer-discretionary stocks. The gains have come despite a weak earnings report in May, and the next set of numbers is scheduled for Tuesday after the closing bell.
Total option volume is quadruple its daily average so far today, according to the Heat Seeker. Calls outnumber puts by a bullish 56-to-1 ratio.